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MOSL: Morning India (20/July/18): 1. Kotak Mahindra Bank; 2. Bajaj Finance; 3. Ultratech Cement; 4. Bajaj Auto (AR); 5. ABB; 6. RBL Bank; 7. D B Corp; 8. H T Media

MOrning India (20/July/18): 1. Kotak Mahindra Bank; 2. Bajaj Finance; 3. Ultratech Cement; 4. Bajaj Auto (AR); 5. ABB; 6. RBL Bank; 7. D B Corp; 8. H T Media

 

Today’s top research idea

RBL Bank: In-line performance, earnings momentum on track

• RBL delivered in-line 1QFY19 performance, with PAT growing 7%/35% QoQ/YoY to INR1.9b. NII grew 46% YoY to INR5.5b, helped by 36% advances growth and 6bp QoQ NIM expansion to 4.04%.
• Opex growth trailed income growth, leading to PPoP growth of 13%/39% QoQ/YoY. Absolute GNPA increased 5% QoQ, while NNPA stood largely flat as the bank provided further on its MFI portfolio, taking up PCR by 284bp QoQ to 60.4%.
• With loan CAGR of ~36% over FY18-20E, we expect stable/improving margins due to a changing loan mix toward high-yielding loans, while operating leverage is likely to improve gradually. We maintain Buy with a TP of INR650 based on 3.4x Mar'20E ABV.

Piping hot news

Rupee weakens past 69 to new closing low

• The rupee weakened further on Thursday, closing past the 69-mark against the dollar for the first time ever as foreign funds continued to stream out of emerging markets on expectations of higher U.S. interest rates. The rupee slid 43 paise to close at 69.05 on a day when most Asian currencies weakened against the dollar. The rupee’s biggest single-day fall since May 29, with the currency touching an intraday low of 69.07, was marked by the absence of central bank intervention, dealers said.